LG Energy secures 4-year supply of lithium concentrate from Canadian firm

LG Energy Solution, a top battery manufacturer in South Korea, has reached a long-term agreement to obtain lithium concentrate from a Canadian firm called Elevra Lithium, according to a press release issued on October 8, 2021. The deal ensures the company will receive 240,000 metric tons of lithium concentrate over the next four years, beginning later in the year.

This strategic move aims to bolster LG Energy's capacity to meet local customer demands while supporting the burgeoning North American energy storage system (ESS) market, as stated by Lee Kang-yeol, the procurement center leader of LG Energy Solution.

The agreement underscores LG Energy's commitment to strengthening its raw material supply chain in North America and bolstering the region's rapidly expanding ESS market. With the increasing demand for ESS batteries, the company plans to expand its lithium iron phosphate (LFP) cell production capacity in North America to over 50 gigawatt-hours (GWh) by December 2021.

This expansion will be achieved through three wholly owned plants in Michigan, USA (LG Energy Solution Michigan-Lansing, LG Energy Solution Michigan-Holland), and two joint venture facilities, one located in Ontario, Canada (NextStar Energy), and the other with Honda Motor Co. in Ohio and General Motors Co. in Tennessee.

The U.S. ESS market is projected to quadruple by 2031, reaching a capacity of 499 GWh, as per market research firm Wood Mackenzie. Battery companies have intensified their efforts to secure ESS battery deals to counteract the stagnant demand for electric vehicle (EV) batteries during the prolonged downturn in the EV market.